Jay Z's music streaming service Tidal was said to have lost millions last year. There were recent reports saying that the business now only possesses working capital enough for half a year.
According to The Verge, this news of near-bankruptcy was first reported by Norwegian-language news site Dagens Næringsliv. The high-fidelity music streaming service apparently lost around 368 million Norwegian Krone (NOK) last year, a value equivalent to $44 million. For comparison, Spotify lost $581 million last year; however, that value is offset by the $3 billion revenue they gained in 2016.
A spokesman for Tidal told The Verge that they have "experienced negative stories about Tidal since its inception." They also claimed that they have done "nothing but grow the business each year."
Still, the company has been reported to only possess a working capital of six months. It should be noted that earlier this year, telecommunications company Sprint invested in a 33 percent stake in the company.
Juan Perez, Jay Z's business partner for the streaming service, said that the Sprint partnership will give Tidal 12 to 18 months of capital. They also expect to break even in mid-2018.
However, for a service that is dependent on subscriber numbers, it is safe to say that Tidal is not doing very well. They have reported 3 million subscriptions in early 2016, but it was soon found out that this number was inflated— the number of actual subscribers was closer to 1 million. For comparison, music streaming giant Spotify has 60 million subscribers, while Apple Music has 30 million.
The streaming service is Jay Z's brainchild, and one of is advantages over Spotify is that it only streams high-quality, lossless music. Tidal's audio files are mostly in CD-quality lossless, and some are even in Master Quality Authenticated (MQA) formats. Spotify's audio quality pales in comparison, with most audio bit rates capped at 320 kilobytes per second (kbps).
